Selling South African property as a non-resident

Section 35A turns on your South African tax residency, not your citizenship and not your immigration status. A South African who moved to Dubai and formally ceased residency is a non-resident seller. A German national who has lived in Cape Town for years is very likely a resident, and section 35A does not touch her sale.

SARS applies the ordinarily resident test first: is South Africa the country to which you naturally and as a matter of course return. If not, the physical presence test follows. You are a resident under it only if you were here for more than 91 days in the current year of assessment, more than 91 days in each of the five preceding years, and more than 915 days across those five in total.

The conveyancer has to form a view on this before transfer, so expect to be asked for evidence: your SARS notice confirming cessation of residency, or proof that you were never registered here.

Good news for anyone who left and kept the house. Ceasing tax residency triggers a deemed disposal of your worldwide assets, but South African immovable property is carved out of that exit charge because it stays in the South African tax net anyway. Emigrating did not create a tax bill on the house. Selling it does.

Any person required to pay a non-resident seller for the disposal of South African immovable property must withhold a percentage of that amount and pay it to SARS. The rate turns on what kind of person the seller is, not the buyer: 7.5% for a natural person, 10% for a company, 15% for a trust.

• Above the threshold it applies to the full price, not the excess. Section 35A does not apply where the amounts payable to you in aggregate do not exceed R2 000 000. One rand over and the whole price is in scope: a natural person selling at R2 000 001 has R150 000 withheld. It is a cliff, not a sliding scale.
• The threshold is per seller, not per property. SARS reads "seller" as the individual joint owner rather than the aggregate of them, spouses married in community of property included. Two non-resident co-owners selling at R3 500 000 receive R1 750 000 each, so nothing is withheld. That is a withholding exemption only, not a capital gains tax one.
• Deposits sit outside it until the sale goes unconditional. Nothing is withheld from a deposit paid to secure the sale while conditions are still outstanding. Once the last suspensive condition is met, the amount that should have come off the deposit is recovered from the payments that follow.
• It is not transfer duty. Section 35A comes out of your proceeds. Transfer duty, whose 2026/27 threshold of R1 210 000 is a different number for a different tax, comes out of the buyer's pocket on top of the price.

The obligation sits on the buyer. In practice the conveyancer holding the price in trust does the withholding and the paying over, but the liability is the buyer's. The clock runs from the date the buyer pays you, normally the day transfer registers: 14 days if the buyer is a South African resident, 28 days if the buyer is also a non-resident.

The buyer is personally liable only if they knew, or should reasonably have known, that you are a non-resident. That is why the notification duty exists. Any estate agent or conveyancer earning remuneration on the deal must tell the buyer in writing, before payment is made, that the seller is a non-resident and that section 35A may apply. One who should reasonably have known and failed to notify is jointly and severally liable for the amount not withheld, capped at their own commission or fee. A buyer who was never notified is not personally liable.

Late payment costs the buyer interest at the prescribed rate from the day after the due date until SARS receives the money, plus a penalty of 10%, and SARS's guide is blunt that there is no provision to waive that interest. None of this is your money once withheld, but a botched withholding stalls a transfer, so it is worth getting right from your side.

Vet the conveyancing firm on this point, and treat a vague answer as a reason to use another. Selling without an agent makes that more important, not less: the main thing an experienced agent brings to a non-resident sale is a conveyancer who already does it routinely.

The withholding is a percentage of the price. Capital gains tax is a percentage of the gain. The two have nothing to do with each other, and on a property that has appreciated modestly the gap is wide. Wider still on a sale at a loss, where the correct tax is nil and the withholding is not.

That gap is what the tax directive exists to close. You apply on form NR03 for a directive that no amount, or a reduced amount, be withheld. SARS may consider only the four factors below, so needing the cash to close on a purchase abroad is not a ground.

You must be registered for South African income tax; if you are not, SARS will register you, which adds time. SARS publishes a processing time of 21 business days, so the application belongs in the diary the day the sale becomes unconditional, not the week before registration. Once the money has been paid over there is no shortcut back: the only route is your assessment for that year, which can be many months away.

This is where a South African tax practitioner earns their fee: the application asks you to demonstrate your likely liability, which means having your base cost documented before you apply. If your records of the original purchase and any improvements are thin, start reconstructing them now.

• Security you have furnished for the tax due on the disposal, a bank guarantee for example.
• Other assets you hold in South Africa.
• Whether you are subject to tax on the disposal at all, which covers roll-over relief and an exemption under a double tax agreement.
• Whether your actual liability is less than the percentage produces, the ground most ordinary sellers rely on: a capital loss, a small gain, or taxable income below the tax threshold.

Whatever is withheld is an advance payment against your normal tax for the year of assessment in which you disposed of the property. It is not a final tax and discharges nothing on its own.

Non-residents are in the South African capital gains tax net for immovable property situated here, for any interest or right in it, and for indirect interests: shares or an ownership interest in an entity where 80% or more of the market value is attributable to South African immovable property and you, with connected persons, hold at least 20%. Hold the property through a company or a trust rather than in your own name and the rate, the exclusions and the exit route all change, so take advice before you sign.

You must file a return for the year of disposal. Fail to file within 12 months of that year end and SARS may raise an estimated assessment off the withheld figure, without your deductions and with no refund. How the gain is calculated, including base cost and the R50 000 annual exclusion, is covered in capital gains tax on property.

Do not count on the primary residence exclusion. SARS's own guidance is that non-residents are unlikely to qualify, while allowing for exceptions. It depends on ordinarily residing in the home, and it does not cover the part of the gain relating to any period after 1 October 2001 when you were not ordinarily resident there, nor any part of the property that was let. Move abroad in 2018, rent the house out, sell now, and most of the gain sits outside it.

South Africa's double tax agreements generally follow the OECD model, which gives the country where the land sits the right to tax gains on it, so a treaty rarely removes the South African liability. What it usually determines is the credit you claim at home. Read yours rather than assuming either way.

Exchange control is administered by the Reserve Bank's Financial Surveillance Department through commercial banks acting as Authorised Dealers. It is a separate approval track from SARS, and which track you are on depends on whether you were ever a South African resident.

If you were never a resident, the position is straightforward. The Reserve Bank's stated position is that non-residents may invest freely here provided the Authorised Dealer sees documentary evidence that the transaction was at arm's length and at a fair market-related price, and that on disinvestment the local sale proceeds of non-resident owned assets are freely transferable. The work is documentary rather than discretionary: your bank will want to see how the purchase was funded from abroad, so find the records from when the money came in.

If you were a resident and ceased residency, it is a different regime. Emigration as an exchange control concept was phased out on 1 March 2021, but the distinction between resident and non-resident assets survived it. Your bank may transfer the funds only once you have ceased tax residency, obtained a SARS tax compliance status PIN letter for an Approval for International Transfer, and been verified as compliant, and only up to the amount SARS approved. On that basis an individual aged 18 or over may transfer up to R10 000 000 per calendar year.

Above R10 000 000 in a calendar year, SARS applies a more stringent verification and the Financial Surveillance Department must approve the transfer separately, with source of funds and anti money laundering checks on top. A single house sale reaches that ceiling easily, so start the application well before transfer. It runs in parallel with the section 35A directive, not after it, and it is usually the longest part. Note that the conversion and the transfer abroad are your bank's job, not the conveyancer's.

• Establish and document your tax residency status before you market the property, and register for South African income tax if you are not. Nothing starts without a tax reference number.
• Reconstruct your base cost: original purchase price, transfer costs, and every capital improvement you can evidence. The directive application and the return both rest on it.
• Work out your likely capital gain before you accept an offer. If the withholding will overshoot it, lodge the NR03 the day the sale becomes unconditional and allow at least the 21 business days SARS publishes.
• Tell the buyer and the conveyancer in writing that you are a non-resident. It protects them, and it stops a missed withholding turning into interest and a 10% penalty mid-transfer.
• If you ceased South African residency, start the Approval for International Transfer application at the same time, not after registration.
• File your return for the year of disposal. Over-withheld tax comes back through the assessment and no other way.